Independent bookseller outrage at the decision to sell the new novel by Carter Beats the Devil author Glen David Gold exclusively through Waterstone's has forced its publisher to back down.

Hodder & Stoughton initially decided to sell the hardback of Gold's Sunnyside, which opens on a day in 1916 when Charlie Chaplin is seen in 800 places simultaneously, exclusively through Waterstone's from July. The rest of the book trade, from independent booksellers to Amazon, would only be able to sell the book in a paperback edition, and only once it came out in the autumn.

But independent booksellers were furious at the move, with some even threatening to boycott the long-awaited novel altogether (Gold's debut, Carter Beats the Devil, was published to critical acclaim in 2001 but there has been nothing from the author since).

This morning Tim Hely Hutchinson, the chief executive of Hodder's parent company Hachette UK, told the Today programme that the Waterstone's exclusive had been a mistake.

"We got this wrong, and so I'm cancelling the exclusivity with the kind permission of Waterstone's," he said in a panel session also featuring independent bookseller James Daunt, founder of Daunt Books. "In retrospect it was a mistake anyway, and choosing between confusion and conspiracy it was definitely in the confusion camp."

He said that Hodder had underestimated the degree of excitement amongst booksellers for the new Gold novel.

"Although the hardback [of Carter Beats the Devil] did not do very well, the paperback did do very well and has been a solid seller for both Waterstone's and independent booksellers for last couple of years," he said. "With the best intentions - and my entrepreneurial colleagues were really trying to do their best - I think we got it a bit wrong and we're correcting that now."

Daunt, who said he couldn't recall a similar exclusive deal happening in his 20 years in bookselling, professed himself delighted with the decision. "Carter Beats the Devil was a fantastic book and we were excited and looking forward to selling [Sunnyside], and then to be denied it was very upsetting," he said.

Carter Beats the Devil is the fictionalised biography of 1920s American stage magician Charles Carter. Peter Preston in the Guardian called it a debut "to blow you away". "It seeks to stun and amaze and deceive and, always, to entertain; and it seldom misses a trick in 600 pulsating pages," he wrote in 2001. Sunnyside follows the fortunes of three men: the son of the world's last - and worst - Wild West star as he goes to fight on the French battlefields; the snobbish Hugo Black who fights against Russia; and Chaplin himself.